Up-sizing preparation: To port or pay-off but pay FTB rates again

jsm4356

Hello,

We have a small flat and are itching to upsize to a small house, hopefully next year. We are in the fortunate position of having enough savings to clear the remaining mortgage on this flat (~£20k) and still cover the costs of moving (~£25k), but we’ve paid premium first-time-buyer (FTB) rates twice over already. Should we hang onto the mortgage, port it to the new place so that we are seen as proven mortgage holders. Or should we clear the mortgage now, save ~£500 in interest (minus exit fees), and suck up another interest penalty as so-called-FTBs the 3rd time over?

i.e. Patience or tidiness?!

In case relevant: We’re on SVR now, and likely to be at 50% equity upon upsizing.

With thanks for any thoughts/advice!
JSM

housebuyer143

What do you mean by FTB rates? You just get the rate that your equity/deposit dictates? 
You are not punished because you have no mortgage when you then start looking to get one 

jsm4356

Thanks - In our experience remortgaging rates are always 1-2% more expensive than FTB rates. For example, we were paying 5% as new mortgage holders when others remortgaging at 3% previously. We’re keen to avoid that premium rate a third time. Or does any extra borrowing (for up-sizing) attract FTB rates whatever our past history and connected porting mortgage?

jsm4356

*remortgaging is cheaper (sorry!)

jsm4356

housebuyer143 said:

What do you mean by FTB rates? You just get the rate that your equity/deposit dictates? 
You are not punished because you have no mortgage when you then start looking to get one 

We were punished twice previously. In 2007 and 2012. Has the FTB penalty in rates gone?

housebuyer143

jsm4356 said:

housebuyer143 said:

What do you mean by FTB rates? You just get the rate that your equity/deposit dictates? 
You are not punished because you have no mortgage when you then start looking to get one 

We were punished twice previously. In 2007 and 2012. Has the FTB penalty in rates gone?

I don't really see it anymore. You might get 0.1 cheaper or maybe selected lenders have special remortgage rates for current customers, but you would have to already be with that lender.
On the flip side I have seen some remortgage rates higher than purchase, because they come with free legals and they want to claw that payment back. 

There isnt enough in it in my opinion to warrant keeping a mortgage and paying interest you don't want to or need to. 

jsm4356

Thank you housebuyer!